Regenerative Medicine Stays Its Course

Tissue Repair and Replacement Business On Upswing After Tenuous Previous Decade

Apligraf is a bilayered, bioengineered cell-based product. According to Organogenesis, the two layers make it effective in speeding up wound healing and achieving healing in wounds previously unresponsive to treatment.

Production of biomaterials for cell, tissue, and bone treatment, repair, or replacement holds the promise of becoming a highly profitable business given that the baby boomers have great expectations for maintaining active lives as long as possible. We’re not talking stainless steel and plastic replacement parts either. We mean highly sophisticated products that can provide scaffolding or more complex matrices for cellular growth, contain living cells, respond to internal biological signals, and that evade tissue rejection by the recipient’s immune system.

While investors remain cautious about backing companies with regenerative medicine products, Gil Van Bokkelen, Ph.D., chairman and CEO of Athersys and chairman of the Alliance for Regenerative Medicine, believes otherwise. “People view regenerative medicine as a far-off objective, but that is not true. There’s a tremendous amount of ongoing work,” he said at the regenerative medicine session of “Biotech Showcase™ 2011” held recently in San Francisco.

And while scientists may be trying to build entirely new organs and develop stem cell-based solutions for regenerative therapeutics, highly complex products have been on the market for a long time. These products are intended to provide a foundation for the body to rebuild itself.

The history of two pioneering companies in the tissue repair and replacement business illustrates some of these complexities and the comprehensive expertise needed to stay the course and build a tissue-regeneration company. Both companies were off to strong starts with products incorporating skin cells, extracellular matrices, and biocompatible scaffolding approved by the FDA and marketed for burn treatment and wound healing. But both companies went bankrupt.

Both Advanced Tissue Sciences (ATS) and Organogenesis’ products have achieved reincarnation in new corporate entities backed by new funding, strategic development planning, and leadership, and each may help define the path to regulatory and commercial success for complex regenerative medicine products.

Dermagraft

Advanced Tissue Sciences, founded by Gail Naughton, Ph.D., in 1987, developed its Dermagraft TransCyte (Dermagraft-TC) product to create an artificial skin for burn patients. The startup raised hundreds of millions of dollars and spent 15 years developing its human tissue products before filing for Chapter 7 bankruptcy liquidation in late 2002. ATS partnered with Smith & Nephew in a joint venture to manufacture its product line. Smith & Nephew tried without success to commercialize the technology itself—and ultimately sold the same rights and facilities in 2006 to Advanced BioHealing.

Dermagraft was approved by the FDA in March 1997 as a temporary wound covering for partial-thickness burns. It was reportedly the first human fibroblast-derived temporary skin substitute approved by the FDA. However, in 1998, the FDA issued a nonapprovable letter for Dermagraft asking for more clinical data supporting the efficacy of the product in its first indication, the management of diabetic foot ulcers.

A 1999 FDA audit of ATS led to a warning letter and a Class II recall after the agency raised concerns that the firm’s temporary skin substitute might have been related to a patient’s death.

The recall and warning letter, which raised questions about environmental monitoring and sterility, sent ATS’ stock into a downward spiral. On March 31, 2003, ATS was liquidated, effectively destroying $300 million of stakeholder financing. Although the company was successful in the development of remarkable breakthrough technologies in the regenerative medicine arena and the building of a substantial portfolio of patents, it never made a profit.

Ultimately the same rights and facilities were sold in 2006 to Advanced BioHealing, which now manufactures and markets Dermagraft. The company had projected revenue of $130 million in 2010.

With a 2010 list price of $1,425, Dermagraft, which requires weekly application, is costly to use. It is indicated for up to eight weekly applications over a 12-week period and consists of fibroblasts derived from human foreskin tissue, extracellular matrix, and a polyglactin mesh bioabsorbable scaffold. The fibroblasts proliferate to fill the interstices of this scaffold and secrete human dermal collagen, matrix proteins, growth factors, and cytokines to create a 3-D human dermal substitute containing metabolically active, living cells.

Dermagraft is in an ongoing pivotal trial in individuals with venous leg ulcers (VLUs) to determine the product’s safety and efficacy in promoting VLU healing. Trial participants have been randomized to receive either weekly applications of Dermagraft and four-layer compression dressings or only weekly applications of four-layer compression dressings (control group). Patients are seen weekly until wound closure is achieved or until the 19-week treatment study is completed. Follow-up visits are to be done monthly for three months.

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